A New Car Was Put into Production

question 56

Multiple Choice

A new car was put into production. It involved many assembly tasks. Each car was inspected at the end of the assembly line and the number of defects per unit was recorded. For the first 100 cars produced,there were 40 defective cars. Some of the cars had no defects,a few had one defect,and so on. The distribution of defects followed a Poisson distribution. Based on the first 100 cars produced,about how many out of every 1,000 cars assembled should have one or more defects?

• A)About 660
• B)About 165
• C)About 630
• D)About 330

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Definitions:

Direct Method

The direct method in cost accounting allocates service department costs directly to producing departments without attempting to apportion them among service departments.

First-In, First-Out Method

An inventory valuation method where the earliest items purchased or produced are the first to be sold, affecting the cost of goods sold and inventory valuation.

Costs Accounted For

Total costs that have been recognized and recorded within a specific accounting period.

Ending Work in Process Inventory

The value of partially completed goods at the end of an accounting period.